Microsoft, IBM Race for Market

MICROSOFT Corporation starts shipping new computer software today that will compete directly with its former partner and patron, International Business Machines Corporation. Mighty IBM began selling its own new software last week.

The showdown is important because the software offerings are operating environments. An operating environment is the underlying computer software that runs all the other software on a computer. Whoever controls that environment has a big say in the future of personal computing. Microsoft is selling Windows 3.1 - an upgrade of its hugely popular Windows 3.0. IBM is offering version 2.0 of OS/2, which had disappointing sales.

But the most important question is not which one will win, but whether either system represents the future of personal computing. For all their competition, OS/2 and Windows represent remarkably similar visions of what that future is. Other operating systems are waiting in the wings.

"We know that something's going to happen in the next two or three years," says Mark Linton, principal scientist at Silicon Graphics, a computer company in Mountain View, Calif. "But how it's going to play out ... I don't know."

At the moment, Microsoft has a huge marketing advantage. It has sold some 10 million copies of its Windows 3.0 program. Users of those programs can upgrade to the new system for $49. Software developers have flocked to write applications for Windows, because it has proved so popular among users.

IBM, by contrast, has only about 1 million copies of OS/2 in the marketplace. Windows users can upgrade to it for $49.

Mr. Linton expects software developers will wait to see how well OS/2 does in the marketplace before writing programs for it.

"This is clearly a story of missed opportunities" for IBM, says Nancy McSharry, an analyst with International Data Corporation in Mountain View, Calif. OS/2 does have a chance to capture the new market for servers - high-end machines that run networks of computers. But the personal computer market belongs to Microsoft, she says.

Introduced five years ago, OS/2 was supposed to be the logical successor to DOS, the operating system that ran IBM's original PC. IBM chose Microsoft to write the program. The two companies worked together on OS/2 until they had a falling out last year.

IBM does have a few advantages. It will bundle OS/2 with its own desktop and laptop computers. OS/2 is also more technologically advanced; it is designed to take advantage of the 32-bit architecture of today's computers, rather than the slower 16-bit architecture of Windows 3.1.

That technological advantage allows OS/2 to do better job of multi-tasking - running more than one program at once - than Windows, says Lucy Baney, IBM marketing director for personal-computer products. Microsoft is expected to introduce its own 32-bit version, Windows NT, later this year. OS/2 and Windows are pushing not only multi-tasking, but also graphical icons instead of character-based commands and a much-talked-about but fuzzy notion called "objects." The term springs from object-oriented program ming (OOP), a newly popular way of writing computer code.

Programmers found that by using OOP, they could also make data appear as objects, which could be manipulated intuitively by users. In its simplest form, a user can take an object on the screen (a letter, for example), move it over to another object (say, the printer), and have the letter print out automatically.

Both Windows 3.1 and OS/2 will allow users to do this. (Some analysts suggest all this is hype. Apple computers have had this capability for years.) But Windows and OS/2 will also allow users to build increasingly sophisticated links between their data, even if they reside on radically different programs.

Mr. Linton hopes that the coming of multimedia - computer systems that integrate text, voice, and images - will push object technology forward. Several companies, including Sun Microsystems and Taligent (the Apple-IBM joint venture), are moving to build object-oriented operating systems from the ground up.